In one of the largest funding rounds by an Indian clean energy producer, sovereign wealth funds GIC Holdings Pte. Ltd and Abu Dhabi Investment Authority (ADIA) have agreed to pump in an additional $329 million in Greenko Energy Holdings.
This fresh tranche follows the $495 million investment in June by the sovereign wealth funds in Greenko to build power storage projects. With multilateral and bilateral agencies, as well as sovereign wealth funds, not showing interest in businesses contributing to climate change, the two sovereign funds have so far infused $2.2 billion in Greenko (including the fresh round), which was founded by Mahesh Kolli and Anil Kumar Chalamalasetty.
“Greenko Energy Holdings (Greenko), one of India’s leading renewable energy companies, has announced the signing of definitive agreements for a primary equity raising of $824 million, which includes a previously announced $495 million raising towards IREP (integrated renewable energy project) Projects Equity commitment, from an affiliate of GIC and by the Abu Dhabi Investment Authority (ADIA),” Greenko Group said in a statement on Thursday.
The investment comes in the backdrop of a power sector package, comprising a new tariff policy and structural reforms in the offing, announced by finance minister Nirmala Sitharaman in her budget speech last week.
India is ranked fourth and fifth, globally, in installed capacities for wind and solar power, respectively.
With competitive solar bids and India’s wind energy sector having transitioned from a feed-in tariff regime, which ensures a fixed price for wind power producers, to tariff-based competitive auctions, obtaining finance at the lowest cost has become key.
The fresh round of investment also comes at a time when India’s emerging green economy will require additional investments of around $80 billion till 2022, growing more than threefold to $250 billion during 2023-30, according to the Economic Survey 2019 presented last week.